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Business transition planning 2015

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An introduction to busines transition planning.
Whether you are selling a business, inheriting a business, transferring a business to a partner or management team, or bringing in a new partner, you need a plan.
B2BPlanner presents an overview of why a plan is necessary, how to prepare a plan, and plan execution.
More information is available at: http://www.ohiobusinesshelp.com/business-transition/

Published in: Business
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Business transition planning 2015

  1. 1. Your Business: Legacy or Liability? Maximize return and limit risk when you sell a business Using Business Transition Planning
  2. 2. Plans Are Useless, but Planning? “In preparing for battle, I have always found that plans are useless but planning is indispensable.” Dwight D. Eisenhower
  3. 3. Reality: Owners Don’t Plan for Transition! • Denial of your mortality • Fear of an undefined future • Fear of losing identity • Think it’s too early to plan • Fear the process is complicated/expensive
  4. 4. Debilitating illness or death Divorce Inheritance by family – management and/ or ownership Sale of business to a third party Transfer to a business partner Sale to the company management team Business Merger Just shutting down! Types of Transitions
  5. 5. Elements of Successful Business Transition 1. Determine Your Required Net Proceeds 2. Get A Realistic Valuation And Cost Estimate 3. Business Improvements to Close the Gap 4. Plan to Minimize Taxes and Fees 5. Develop a Formal Transition Plan
  6. 6. 80% have over 50% of their wealth in their business 70% do not have a business succession plan Over 60% do not know the true value of their business Reality: The Facts About Business Owners
  7. 7. Planning To Sell? 5 million businesses Will go up for sale in the next 5 years Only 1 in 4 of businesses for sale are sold
  8. 8. ODDS AT THE CRAPS TABLE AT A CASINO? 50-50
  9. 9. 41% of Owners Plan For Their Kids To Take over the Business, But … Only 30% of inherited businesses survive into the second generation Planning for Inheritance? And only 12% into the 3rd generation!
  10. 10. Another FACT The value of executing a successful transition plan has been determined to SUBSTANTIALLY exceed $1000 per hour for the time spent by the owner.
  11. 11. Assess Plan Execute Getting It Done In 6 Months Phase III 45-60 Days • Inventory competencies • Individual development • Accountability • Measure Phase II 45-60 Days • Future Goals • Gap Analysis • Performance management • Action Plan Phase I 30-60 Days • Owner Commitment • Establish Team • Baseline Assessment
  12. 12. Business Owner Business Lawyer Accountant Business Broker Financial Planner Business Advisor Transition Coach Family Estate & Tax Planning Building A Transition Team
  13. 13. 0 2 4 6 8 <$499K $500K - $1 M $1M - $2M $2M- $5M $5M - $50M 2.6 2.9 4.3 4.5 5.4 Average EBITA Multiple EBITA Multiple for SCORE >80 Calculating Value Based on EBITA Increasing “Sellability” Source: “Built To Sell”, 2012
  14. 14. Transition Planning Guidelines • Create a Positive Vision of the Future • Define roles and responsibilities and put them in writing • Keep everyone in the loop throughout the process • Seek external advice from consultants to resolve issues objectively • Communicate a clear action plan to all stakeholders
  15. 15. Business risk exposure – economy, industry, individual Business “resilience” and stability Business performance Availability of financing Maximizing net value – taxes, fees, assets Ownership structure Key Transition Valuation Issues
  16. 16. To obtain a more extensive slide presentation, a planning worksheet, or to discuss your plan contact me at Art@Ohio BusinessHelp.com (937)985-0481
  17. 17. Organizations International Business Brokers Association www.ibba.org International Succession Planning Association: http://www.ispassociation.org/ Family Business Institute: www.familybusinessintit.reachlocal.com Publications: Built to Sell http://www.thesellabilityscore.com/ The Family Business Crisis, by Wayne Vanwyk “www.thebusinesstransitioncrisis.com Family Business Succession: The Final Test of Greatness McClure, Stephen L Every Family’s Business, 12 common sense questions by Thomas Dean. www.everyfamiliesbusiness.com NOLO Guide to Selling A Business by Fred Steingold www.nolo.com Additional Resources

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